SPRINGFIELD, Mass. (WWLP) – The Dow saw its worst drop of 2019 on Wednesday, plunging 800 points and sparking recession fears.
“It makes me concerned because that is an indication of economic problems, and that we could be moving towards a big recession,” Bob Loesch of Springfield said.
But, Matt Farkas of St. Germain Investment Management told 22News that people should not be worried about a recession just yet.
“It was a bad day, there’s no escaping that,” said Farkas. “We were down about 3 percent or so. But, these things do happen. Anyone invested in the stock market should expect something like this to happen from time to time,” Farkas said.
Farkas said a recession is when the economy declines for at least six months. There’s a drop in five economic indicators during a recession: real gross domestic product, income, employment, manufacturing, and retail sales.
But right now, Farkas said the economy is doing well. The unemployment rate is at a 50-year low and wages are up. Farkas told 22News there’s no need to panic or make any rash decisions about your stocks.
“Typically, the worst thing that could happen is somebody overreacts to noise, gets off their financial plan, and then, they really regret it down the road,” added Farkas.